Commentary: The New Rules Of Economic Development

Sunday

When it comes to economic development, the old rules don’t apply. The communities that understand the new rules are the ones that will get the jobs.

When it comes to economic development, the old rules don’t apply. The communities that understand the new rules are the ones that will get the jobs.

The old rules operated sort of like this. Step one: Find a flat piece of ground. Step two: Use local resources and government grants to run pipes to that ground and maybe build a 50,000-square-foot empty building. Step three: Wait for the Arkansas Economic Development Commission, or whatever it was called at the time, to call with a prospect offering $10-an-hour jobs.

Those rules don’t apply today, not when so many low-skilled jobs have been automated or sent overseas.

Under today’s rules, employers are looking for a trained and trainable workforce and a livable community that will attract and retain senior and technical personnel. After all, the people deciding where to locate the facility might have to live there, too.

Brad Lacy, Conway Chamber of Commerce president and CEO, told me his city spends its efforts building the city, not marketing it, because employers have such good data available that a brochure won’t tell them anything they don’t already know.

College towns like Conway have a huge advantage in this new environment because they have an educated workforce, abundant training opportunities and diverse amenities. Last week, HP, which earlier this year cut its payroll by 500 at its Conway location, announced it was bringing 200 high-skilled jobs to town that will pay more than the ones that left.

Still, Randy Zook, Arkansas State Chamber of Commerce president and CEO, said cities without four-year schools can compete for jobs — just not always the same jobs for which college towns compete. Those communities need to make themselves as attractive as possible, starting with improving their public schools and working with nearby community colleges, even if those colleges are 20 miles away in the next city. People will drive for work.

And, like college towns, cities without four-year schools must build upon their own strengths. Stuttgart, for example, is nowhere near a university, but it has a two-year college campus and calls itself the duck hunting capital of the world. The executives deciding where to locate a facility just might be duck hunters.

"What I hear in manufacturing plant after manufacturing plant is our biggest problem is the quality of life for our senior personnel, for our management and technical people," he told me. "They come and they’re concerned about the schools, they’re concerned about just the whole range of quality of life issues like restaurants to movies to just things to do for their family. Those are the things that people pay attention to."

The next few years offer an opportunity to create jobs in Arkansas. Walmart has announced it will buy an extra $50 billion in American-made goods over the next 10 years. At the same time and not coincidentally, it’s becoming less advantageous for some manufacturers to operate facilities in China. Wages are rising there, pollution is a huge problem, its utilities are less than fully developed, and it’s expensive to ship products back across the Pacific Ocean.

Many of the manufacturing jobs that return will be different from the ones that left. During a visit to the Frito-Lay plant in Jonesboro, Zook watched Star Wars-like processes being used to make snack foods. He watched one well-paid employee control automated pallet trucks – forklifts without the forklift drivers – that moved products from production lines to a warehouse where no humans were present.

"You just sit there with your mouth open thinking, ‘Good Lord, she’s sitting there doing the work of what used to be 20 people,’" he said.

Moving forward, manufacturing jobs will be higher-tech, higher-skilled and higher-paying, but there will be fewer of them needed. Which communities will get those jobs? The ones that are ready for them.

Steve Brawner is a freelance journalist, a former newspaper editor, and a former aide to former Gov. Mike Huckabee and Lt. Gov. Win Rockefeller. Email: brawnersteve@mac.com

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